Can You Predict That? Predicting Home Prices with Machine Learning

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• Home Prices in Texas

import json
import geopandas as gpd
import pandas as pd
import numpy as np
import folium
from folium.plugins import DualMap
# libraries for machine learning model and folium map
from sklearn.model_selection import train_test_split
# from sklearn.preprocessing import OneHotEncoder
from xgboost import XGBRegressor
from sklearn.metrics import mean_squared_error, mean_absolute_error, r2_score
from folium.features import GeoJson, GeoJsonTooltip

Home Prices in Texas

What is the average home price by Zipcode in Texas?

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# Here I am reading in my data
df = pd.read_csv("./ml_datasets/US Homes Data (For Sale Properties).csv")

# I filter to only keep data from the state of Texas, specifically for homes that are for sale
df = df[(df["state"].isin(["TX"])) & (df["property_status"].isin(["FOR_SALE"])) & (~df["living_space"].isin([0,1,2,3]))]

# I only look at apartments, condo, manufactured, multi_family, single_family, and townhouse homes
df = df[~df['property_type'].isin(['LOT'])]

# I filter out the rows with negative landscape values
df = df[~df['land_space'].isin([-10890.0])]

# Here I change acres to square feet in the land_space column
df['land_space'] = round(df.apply(lambda row: row['land_space'] * 43560 if row['land_space_unit'] == 'acres' else row['land_space'], axis=1),2)

# Here I make the price_per_unit column more accurate
df['price_per_unit'] = round(df['price'] / df['living_space'], 2)
df['price_per_unit'] = df.apply(lambda row: round(row['price'] / row['living_space'], 2) if (row['living_space'] > 0) and not pd.isna(row['living_space']) else row['price_per_unit'], axis=1)

# Here I drop the extra columns that I do not need, and can drop now
df = df.drop(['property_url','property_id', 'address', 'street_name', 'apartment', 'city', 'state','land_space_unit', 'broker_id', 'property_status',
              'year_build', 'total_num_units' , 'listing_age', 'RunDate', 'agency_name', 'agent_name', 'agent_phone', 'latitude', 'longitude',
              'price_per_unit'], axis=1).reset_index(drop=True)

# One-hot encoding
df = pd.get_dummies(df, columns=['property_type'], dtype='int')

# Here I change the name of my postcode column to zip_code
df.rename(columns={'postcode': 'zip_code'}, inplace=True)

# Machine learning preparation.
# Turning the city column to a categorical type
# This is important for XGBoost to handle the data correctly
# df['city'] = df['city'].astype('category')
# ml_df = df.copy()

# Load the GeoJSON shape file for Texas ZIP codes
url = "https://raw.githubusercontent.com/OpenDataDE/State-zip-code-GeoJSON/refs/heads/master/tx_texas_zip_codes_geo.min.json"
zip_shapes = gpd.read_file(url)

# Make sure ZIP codes are strings (important for matching)
df['zip_code'] = df['zip_code'].astype(str)
zip_shapes['ZCTA5CE10'] = zip_shapes['ZCTA5CE10'].astype(str)

# Here I do a left join (everything from the ml_df and only matching rows from zip_shapes)
new_df = pd.merge(df,zip_shapes, left_on='zip_code', right_on='ZCTA5CE10', how='left')

# Here I drop the extra columns that I do not need
ml_clean = new_df.drop(['STATEFP10', 'ZCTA5CE10', 'GEOID10','CLASSFP10', 'MTFCC10', 'FUNCSTAT10', 'ALAND10',
                          'AWATER10', 'INTPTLAT10', 'INTPTLON10', 'PARTFLG10'], axis=1)

# Tell GeoPandas which column holds the geometry
ml_clean = gpd.GeoDataFrame(ml_clean, geometry='geometry')

# Check the current coordinate reference system (CRS)
# print(ml_clean.crs)

# Now I can safely extract spatial features

# Extract spatial features
# Calculate centroid coordinates in meters
ml_clean['zip_centroid_lon'] = ml_clean.geometry.centroid.x
ml_clean['zip_centroid_lat'] = ml_clean.geometry.centroid.y

# Here I drop the geometry column (not needed for modeling) and city column (one-hot encoding and label encoding are not ideal for this column)
ml_clean = ml_clean.drop(columns=['geometry'])

# Drop zipcode for model training
X = ml_clean.drop(columns=['price'])
y = ml_clean['price']

# Here I make the target variable a log to improve my machine learning model performance
y = np.log1p(y)

X_train_full, X_test_full, y_train, y_test = train_test_split(X, y, test_size=0.2, random_state=42)

# Here I save the zipcodes separately before I drop them for modeling

# Zipcodes aligned to my training set
zip_train = X_train_full['zip_code'].reset_index(drop=True)

# Zipcodes aligned to my test set
zip_test = X_test_full['zip_code'].reset_index(drop=True)

# Here I remove the zipcodes from the actual training data
X_train = X_train_full.drop(columns=['zip_code'])
X_test = X_test_full.drop(columns=['zip_code'])

# create model instance
xgb = XGBRegressor(n_estimators=350, max_depth=10, learning_rate=.01, random_state=42)
# fit model
xgb.fit(X_train, y_train)
# make predictions
y_pred = xgb.predict(X_test)

print("Mean Absolute Error (MAE):", mean_absolute_error(y_test, y_pred))
print("Mean Squared Error (MSE):", mean_squared_error(y_test, y_pred))
rmse = np.sqrt(mean_squared_error(y_test, y_pred))
print("Root Mean Squared Error (RMSE):", rmse)
print("R² Score:", r2_score(y_test, y_pred))

# # undo the log1p transformation to get the actual price predictions
# y_pred = np.expm1(y_pred)
# y_test = np.expm1(y_test)

results = pd.DataFrame({
    'zip_code': zip_test,
    'prediction': y_pred,
    'actual_price': y_test.reset_index(drop=True)
})

# results

# Here I group by zip_code column and calculate the mean of the prediction and actual values
results = results.groupby('zip_code')[['prediction', 'actual_price']].mean()

# Round to two decimal places
results['actual_price'] = results['actual_price'].round(2)

# Here I change the name of my predicition column and actual price column
results = results.rename(columns={'prediction': 'average_price_prediction_log', 'actual_price': 'actual_average_price_log'})

results = pd.DataFrame(results).reset_index()

# undo the log1p transformation to get the actual price predictions in different columns
results['average_price_prediction'] = np.expm1(results['average_price_prediction_log'])
results['actual_average_price'] = np.expm1(results['actual_average_price_log'])


# Here I do a left join (everything from the ml_df and only matching rows from zip_shapes)
results = pd.merge(results,zip_shapes, left_on='zip_code', right_on='ZCTA5CE10', how='left')

# Here I drop the extra columns that I do not need
results = results.drop(['STATEFP10', 'ZCTA5CE10', 'GEOID10','CLASSFP10', 'MTFCC10', 'FUNCSTAT10', 'ALAND10',
                          'AWATER10', 'INTPTLAT10', 'INTPTLON10', 'PARTFLG10'], axis=1)

# Tell GeoPandas which column holds the geometry
results = gpd.GeoDataFrame(results, geometry='geometry')

# Simplify geometry to reduce file size (tolerance controls precision)
# Tolerance controls how much simplification is applied. Higher values = more simplification (more vertices removed).
# Lower values = more detailed shape retained. In this case, 0.01 is a relatively small simplification, meaning fine detail is mostly preserved.
# preserve_topology=True ensures that the simplified geometry does not become invalid. Prevents things like self-intersecting polygons, holes merging or disappearing incorrectly, borders of neighboring shapes overlapping or separating when they shouldn’t.
results['geometry'] = results['geometry'].simplify(tolerance=0.01, preserve_topology=True)

# results

Mean Absolute Error (MAE): 0.22063838742237502
Mean Squared Error (MSE): 0.1207861593836633
Root Mean Squared Error (RMSE): 0.34754303241996276
R² Score: 0.8472178918654716

# The actual heat map
# geojson_data = tacos.__geo_interface__  # convert GeoDataFrame to GeoJSON
# Create a map centered over Texas
# width="35%", height="70%"
m1 = folium.Map(location=[31.9686, -99.9018], zoom_start=5.25, tiles="openstreetmap")

# Add the choropleth (color-coded layer)
folium.Choropleth(
    # This is the GeoJSON data that contains the shapes of the ZIP code areas.
    geo_data=results,
    # This is the data that I want to visualize.
    data=results,
    # Here I specify what columns to use (the column that ties to the geographic shapes and the column with the data to visualize).
    # The first column is the ZIP code, and the second column is the average price.
    columns=['zip_code', 'average_price_prediction_log'],
    # The key_on value should be a string that represents the path in the GeoJSON structure to the property (key) that holds the value you want to match with the data DataFrame.
    key_on='feature.properties.zip_code',
    # This sets the color scale used to fill each area.
    fill_color='plasma',
    # This sets the transparency of the filled areas.
    fill_opacity=0.7,
    # This sets the transparency of the boundary lines between the geographic shapes.
    line_opacity=0.45,
    legend_name= "Average Price Prediction (Log Scale- Smallest to Largest)"
).add_to(m1)

tooltip = GeoJson(
    results,
    style_function=lambda x: {
        # Don't add a fill color (we're already coloring with the choropleth)
        'fillColor': 'transparent',
        # Hide the border line color
        'color': 'transparent',
        # No border line thickness
        'weight': 0
    },
    tooltip=GeoJsonTooltip(
        # Columns to display in the tooltip
        fields=['zip_code', 'average_price_prediction'],
        # What to display as labels for the fields (instead of the column names)
        aliases=['ZIP Code:', 'Average Price Prediction:'],
        # Formats numbers using local formatting (e.g. commas in large numbers)
        localize=True,
        # Tooltip "sticks" to your mouse as you move around that shape. Nice UX
        sticky=True,
        # Shows the field names (the aliases you defined).
        labels=True
    )
).add_to(m1)

# The actual heat map
# geojson_data = tacos.__geo_interface__  # convert GeoDataFrame to GeoJSON
# Create a map centered over Texas

# width="35%", height="70%"
m2 = folium.Map(location=[31.9686, -99.9018], zoom_start=5.25, tiles="openstreetmap")

# Add the choropleth (color-coded layer)
folium.Choropleth(
    # This is the GeoJSON data that contains the shapes of the ZIP code areas.
    geo_data=results,
    # This is the data that I want to visualize.
    data=results,
    # Here I specify what columns to use (the column that ties to the geographic shapes and the column with the data to visualize).
    # The first column is the ZIP code, and the second column is the average price.
    columns=['zip_code', 'actual_average_price_log'],
    # The key_on value should be a string that represents the path in the GeoJSON structure to the property (key) that holds the value you want to match with the data DataFrame.
    key_on='feature.properties.zip_code',
    # This sets the color scale used to fill each area.
    fill_color='plasma',
    # This sets the transparency of the filled areas.
    fill_opacity=0.7,
    # This sets the transparency of the boundary lines between the geographic shapes.
    line_opacity=0.45,
    legend_name= "Actual Average Price (Log Scale - Smallest to Largest)"
).add_to(m2)

tooltip = GeoJson(
    results,
    style_function=lambda x: {
        # Don't add a fill color (we're already coloring with the choropleth)
        'fillColor': 'transparent',
        # Hide the border line color
        'color': 'transparent',
        # No border line thickness
        'weight': 0
    },
    tooltip=GeoJsonTooltip(
        # Columns to display in the tooltip
        fields=['zip_code', 'actual_average_price'],
        # What to display as labels for the fields (instead of the column names)
        aliases=['ZIP Code:', 'Actual Average Price:'],
        # Formats numbers using local formatting (e.g. commas in large numbers)
        localize=True,
        # Tooltip "sticks" to your mouse as you move around that shape. Nice UX
        sticky=True,
        # Shows the field names (the aliases you defined).
        labels=True
    )
).add_to(m2)

# Save the maps as separate HTML files
m1.save("ml_datasets/predicted_price_map.html")
m2.save("ml_datasets/actual_price_map.html")

# Display the combined maps (e.g., in a Jupyter Notebook or save to HTML file)
from IPython.display import HTML

# Embed maps side-by-side in HTML
html_string = """
    <div style="display: flex;">
        <div style="width: 50%; height: 100%;">
            <h3>Average Price Prediction (Log Scale- Smallest to Largest)</h3>
            {m1}
        </div>
        <div style="width: 50%; height: 100%;">
            <h3>Actual Average Price (Log Scale - Smallest to Largest)</h3>
            {m2}
        </div>
    </div>
""".format(m1=m1._repr_html_(), m2=m2._repr_html_())

HTML(html_string)

Average Price Prediction (Log Scale- Smallest to Largest)

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Actual Average Price (Log Scale - Smallest to Largest)

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